It has, at times, been jarring this year to hear so many calls for the state to step in and support the economy through the Covid-19 crisis. From supporting wages, providing cheap loans and paying cash grants to businesses big and small, governments have been playing an outsized role in our economies that few would ever have envisaged or believed possible.
That is the scale of the crisis the pandemic has wrought on the world this year. The virus may be impartial as to who it infects, but it does discriminate in its economic impact.
The economic fallout has led to a structural shift in our economy, creating both winners and losers. Those who are most impacted by the measures to fight the pandemic – notably small, domestic-oriented businesses in retail, hospitality and leisure – have borne the brunt, as have their employees.
The winners are those that have scale, staff who can work from home, and the ability to take advantage of digital transformation. Their response to the pandemic is accelerating the move towards a digital future, raising the fundamental point that not everyone gains from the trend.
That divergence engenders a responsibility for those who have thrived to support those who are struggling.
Earlier in the summer I spoke to the CEO of a large Irish company that had initially used the state’s wage subsidy scheme in the spring, only to return the cash as activity levels had improved by the summer and his worst fears didn’t come to pass.
It’s doubtful that his company was the only one to see business pick up. Looking at this more widely, is it not time for businesses that are coming through this crisis to show leadership and urge those that are returning to normality (albeit a different form of normality) to provide a ladder for those that haven’t?
The economic crisis we face comes at a time when capitalism has been called into question for creating winners and losers and increasing inequality
It has been far too easy to call on the state to do more and more, at a time when the state’s own resources are diminished. Some business leaders are helping out where they can – paying suppliers more quickly, extending payment dates and even looking at ways to take on staff from companies they know are letting people go. They are showing what can be done if people step up to the challenge. What more could happen if business leaders decided to act together?
The economic crisis we face because of the coronavirus comes at a time when the tenets of capitalism have been called into question for creating winners and losers and for increasing inequality. If we’re to come through this we need businesses to step up their efforts to provide as much support as possible too. If now is not a time for that, when will it be?
